#Demonetisation:What did the Stupidity Cost?
Today Monday it's the 5th anniversary of that day of monumental stupidity when banknotes were withdrawn from circulation. It was Modi’s stupidity!Who can forget that day?
According to a 2011 Pew Research Survey,95% of Americans
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Today Monday it's the 5th anniversary of that day of monumental stupidity when banknotes were withdrawn from circulation. It was Modi’s stupidity!Who can forget that day?
According to a 2011 Pew Research Survey,95% of Americans
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95% of Americans born in 1955 or earlier said they could recall exactly where they were or what they were doing when Kennedy was killed.The sheer trauma of the event etches the day vividly in our memories.Indira Gandhi’s assassination on October31, 1984 was yet another day.
95% of Americans born in 1955 or earlier said they could recall exactly where they were or what they were doing when Kennedy was killed.The sheer trauma of the event etches the day vividly in our memories.Indira Gandhi’s assassination on October31, 1984 was yet another day.
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Most of us who were alive then can recall small details of that day.Even now I can recall every incident and conversation of that day.The demonetization of November8 2016 has become another day similarly etched in most minds.
I was entertaining some friends at home
Most of us who were alive then can recall small details of that day.Even now I can recall every incident and conversation of that day.The demonetization of November8 2016 has become another day similarly etched in most minds.
I was entertaining some friends at home
4/15
when I heard that the @PMOIndia was going to speak to the nation. My friends &myself clustered around the TV and heard Narendra Modi make the announcement by saying:“Brothers & sisters,To break the grip of corruption and black money,we have decided that the ₹500 & ₹1,000
when I heard that the @PMOIndia was going to speak to the nation. My friends &myself clustered around the TV and heard Narendra Modi make the announcement by saying:“Brothers & sisters,To break the grip of corruption and black money,we have decided that the ₹500 & ₹1,000
5/15
currency notes presently in use will no longer be legal tender from midnight tonight, that is 8th November 2016”.All the ₹.1000 & ₹500 notes I had were in my pocket that day. It was not much, but the sheer fact that they were no longer worth anything was disconcerting.
currency notes presently in use will no longer be legal tender from midnight tonight, that is 8th November 2016”.All the ₹.1000 & ₹500 notes I had were in my pocket that day. It was not much, but the sheer fact that they were no longer worth anything was disconcerting.
6/15
I also realized that my savings in the bank were now worth only ₹4000 a week.Suddenly,I not only felt naked and vulnerable,but also hugely humiliated.
One of the persons at dinner that evening was some1 known to us as having lots of money.But he showed no signs of concern
I also realized that my savings in the bank were now worth only ₹4000 a week.Suddenly,I not only felt naked and vulnerable,but also hugely humiliated.
One of the persons at dinner that evening was some1 known to us as having lots of money.But he showed no signs of concern
7/15
I asked him if he would hurt due to this? He replied,not any more than you. He then said something I will never forget. Those who have lots of “number two” don’t become rich by being stupid. The money on which income taxes were not paid is always kept in kind or
I asked him if he would hurt due to this? He replied,not any more than you. He then said something I will never forget. Those who have lots of “number two” don’t become rich by being stupid. The money on which income taxes were not paid is always kept in kind or
8/15
always kept in kind or out of the reach of the nations financial system.That I knew was true, as research had consistently shown that of the undeclared income each year,almost half is invested in property,&abt 44-46% equally invested in gold, jewellery&illicitly exported
always kept in kind or out of the reach of the nations financial system.That I knew was true, as research had consistently shown that of the undeclared income each year,almost half is invested in property,&abt 44-46% equally invested in gold, jewellery&illicitly exported
8/15
Cash,By sudden demonetization the government sucked out almost 87% of the money in the system or Rs.15.44 L crores.When @narendramodi announced this demonetization to rid the nation of “black money”,which really means income&financial transactions that didn’t realize for the
Cash,By sudden demonetization the government sucked out almost 87% of the money in the system or Rs.15.44 L crores.When @narendramodi announced this demonetization to rid the nation of “black money”,which really means income&financial transactions that didn’t realize for the
9/15
realize for the state its rightful share of taxes,the entire nation welcomed it.The other reasons the government gave for this is that it wanted the purge the system of counterfeit notes&breakup the terror finance network.
There was indeed a certain problem with ₹1000 ...
realize for the state its rightful share of taxes,the entire nation welcomed it.The other reasons the government gave for this is that it wanted the purge the system of counterfeit notes&breakup the terror finance network.
There was indeed a certain problem with ₹1000 ...
10/15
₹1000 counterfeits. In 2014-15 they rose by 22% to almost 6 lakh pieces. In 2015-16 of the counterfeits detected, 415 were in 500’s,35% in 100’s&the rest in 1000’s.Consider this against the fact that in April this year there were 1646 crores of 500’s&1642 crores of 100’s..
₹1000 counterfeits. In 2014-15 they rose by 22% to almost 6 lakh pieces. In 2015-16 of the counterfeits detected, 415 were in 500’s,35% in 100’s&the rest in 1000’s.Consider this against the fact that in April this year there were 1646 crores of 500’s&1642 crores of 100’s..
11/15
100’s in circulation. In relation to this the counterfeits were small change¬ distorting the system by much.A better way could have been found to filter them out by an orderly exchange of high value notes.The RBI now reports that the detection of counterfeit notes was...
100’s in circulation. In relation to this the counterfeits were small change¬ distorting the system by much.A better way could have been found to filter them out by an orderly exchange of high value notes.The RBI now reports that the detection of counterfeit notes was...
12/15
was 20.4 percent higher in FY17 than the previous year.Despite the rise the total value of counterfeit notes amounted to an insignificant Rs 42 crore. So was it worth the trouble?
It’s very evident that the Govt was clearly unprepared to embark upon such a major “reform.”
was 20.4 percent higher in FY17 than the previous year.Despite the rise the total value of counterfeit notes amounted to an insignificant Rs 42 crore. So was it worth the trouble?
It’s very evident that the Govt was clearly unprepared to embark upon such a major “reform.”
13/15
It’s very evident that the government was clearly unprepared to embark upon such a major“reform.”When the crunch was inflicted the RBI and the banks did not have enough notes in other denominations to pick up the slack, even somewhat.Instead the nation experienced the....
It’s very evident that the government was clearly unprepared to embark upon such a major“reform.”When the crunch was inflicted the RBI and the banks did not have enough notes in other denominations to pick up the slack, even somewhat.Instead the nation experienced the....
14/15
the breakdown of the financial system& the severe pain it has inflicted on the hundreds of millions who sustain themselves as daily wage earners,small retailers of perishable goods&farmers who have to invest now to sow and reap harvests of food grains and fruits& vegetables
the breakdown of the financial system& the severe pain it has inflicted on the hundreds of millions who sustain themselves as daily wage earners,small retailers of perishable goods&farmers who have to invest now to sow and reap harvests of food grains and fruits& vegetables
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It took the RBI many months just to replace the high value notes.Till then the anemia persisted.There was bound to be economic costs for this prolonged anemia.The former PrimeMinister Dr. #ManmohanSingh,less of a politician& more of a top-notch economist, estimated
Cont..
It took the RBI many months just to replace the high value notes.Till then the anemia persisted.There was bound to be economic costs for this prolonged anemia.The former PrimeMinister Dr. #ManmohanSingh,less of a politician& more of a top-notch economist, estimated
Cont..
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the consequential contraction of GDP to be about 2%.He has now been proven almost on target.The official GDP figures are confirming this.Apart from the ₹36000 crores,which is the estimated cost of the new ₹500&₹2000 notes, the loss of GDP will amount to about ₹3Lakh Cr
the consequential contraction of GDP to be about 2%.He has now been proven almost on target.The official GDP figures are confirming this.Apart from the ₹36000 crores,which is the estimated cost of the new ₹500&₹2000 notes, the loss of GDP will amount to about ₹3Lakh Cr
17/..
This is money that cannot be recovered ever. It was just madness.
Now look at the scale of damage caused.India has a work force of close to 450 million.Of these only 7% are in the organized sector.Out of these 31.5 million abt 24 million are employed by the state or state
This is money that cannot be recovered ever. It was just madness.
Now look at the scale of damage caused.India has a work force of close to 450 million.Of these only 7% are in the organized sector.Out of these 31.5 million abt 24 million are employed by the state or state
18/..
state or state owned enterprises,the rest being in private sector employment. Of this vast reservoir of over 415 million employed in the unorganized sector about half are engaged in the farm sector,another 10% each in construction,small-scale manufacture and retail.
Contd..
state or state owned enterprises,the rest being in private sector employment. Of this vast reservoir of over 415 million employed in the unorganized sector about half are engaged in the farm sector,another 10% each in construction,small-scale manufacture and retail.
Contd..
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These are mostly daily wageworkers and mostly earning less than the officially decreed minimum wages.The economy may not have ground to a complete halt,but in hundreds of million homes the cooking fires were not being lit in the immediate aftermath.This is becos most daily
These are mostly daily wageworkers and mostly earning less than the officially decreed minimum wages.The economy may not have ground to a complete halt,but in hundreds of million homes the cooking fires were not being lit in the immediate aftermath.This is becos most daily
To be continued...
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This is because most daily wage earners were not getting paid in full or even in part.And even if they are paid with the old notes,and even if they could enter banks,where were the smaller notes or even new notes for the banks to exchange them with?
Thus,a good part of ...
This is because most daily wage earners were not getting paid in full or even in part.And even if they are paid with the old notes,and even if they could enter banks,where were the smaller notes or even new notes for the banks to exchange them with?
Thus,a good part of ...
21/..
of this so-called“black money”held in ₹500&₹1000 notes that the Govt had choked off were actually money in flow. What the Govt was seeking to unearth was a smaller part of the money in stock,held by businesspeople, politicians bureaucrats.But in its professed anxiety to..
of this so-called“black money”held in ₹500&₹1000 notes that the Govt had choked off were actually money in flow. What the Govt was seeking to unearth was a smaller part of the money in stock,held by businesspeople, politicians bureaucrats.But in its professed anxiety to..
22/..
anxiety to unearth this the Govt had effectively thrown out the baby with the bathwater.
And consider this as much as 55% of the FDI investment(abt $44 billon last yr)is actually Indian owned money round tripping its way back frm the economy it cheated of its taxes.
Cont'd
anxiety to unearth this the Govt had effectively thrown out the baby with the bathwater.
And consider this as much as 55% of the FDI investment(abt $44 billon last yr)is actually Indian owned money round tripping its way back frm the economy it cheated of its taxes.
Cont'd
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Is the Govt now going the look at this gift horse in the mouth,by asking these ECB’s to declare their origins?
After not anticipating the scope of the economic devastation visiting the nation,@narendramodi began singing a new song.He began hollering that he was..
Cont'd..
Is the Govt now going the look at this gift horse in the mouth,by asking these ECB’s to declare their origins?
After not anticipating the scope of the economic devastation visiting the nation,@narendramodi began singing a new song.He began hollering that he was..
Cont'd..
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PM began hollering that he was fighting for the vast mass of the poor who have been looted all these decades by the upper classes.He thus demonized the upper classes and has fired the starting gun for class warfare.Fortunately or unfortunately the most vociferous of his....
PM began hollering that he was fighting for the vast mass of the poor who have been looted all these decades by the upper classes.He thus demonized the upper classes and has fired the starting gun for class warfare.Fortunately or unfortunately the most vociferous of his....
25/..
Fortunately or unfortunately the most vociferous of his supporters are exactly the people with most of the“black wealth.”
In the days afr #Demonetization @narendramodi Govt alluded to a windfall tat was expected becos of the “black”cash tat will not b returned to the banks
Fortunately or unfortunately the most vociferous of his supporters are exactly the people with most of the“black wealth.”
In the days afr #Demonetization @narendramodi Govt alluded to a windfall tat was expected becos of the “black”cash tat will not b returned to the banks
26/..
They were expecting almost a third of the notes wouldn't be returned&this will realize the Govt over ₹4 Lakh Cr,money that will come handy to recapitalize the PSU banks burdened with NPAs. According to ReserveBank of India’s (RBI)Annual Report released last month, 98.96%..
They were expecting almost a third of the notes wouldn't be returned&this will realize the Govt over ₹4 Lakh Cr,money that will come handy to recapitalize the PSU banks burdened with NPAs. According to ReserveBank of India’s (RBI)Annual Report released last month, 98.96%..
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RBI's Annual Report released last month,98.96% of ₹500&₹1000 notes(by value)that were invalidated due to the demonetization exercise had been returned.The estimated value of the banned notes the RBI has“received”is ₹15.28 lakh Cr.This compares with the Rs 15.44 lakh Cr
RBI's Annual Report released last month,98.96% of ₹500&₹1000 notes(by value)that were invalidated due to the demonetization exercise had been returned.The estimated value of the banned notes the RBI has“received”is ₹15.28 lakh Cr.This compares with the Rs 15.44 lakh Cr
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This compares with the ₹15.44 lakh crores of the invalidated notes that were in circulation as of 8 Nov.Quite clearly the entire demonetization exercise was a huge failure and nothing short of a great vandalism of the economy.#India has not yet recovered from this trauma!
This compares with the ₹15.44 lakh crores of the invalidated notes that were in circulation as of 8 Nov.Quite clearly the entire demonetization exercise was a huge failure and nothing short of a great vandalism of the economy.#India has not yet recovered from this trauma!
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